California Passes France on Economic Ladder

By TODD S. PURDUM

Published: June 15, 2001

LOS ANGELES, June 14 — Forget those occasional contests in which a California cabernet beats out a French Bordeaux. Here is a real blow to the chauvinism of the nation that invented the word: La Belle France has been bumped from fifth place among the world's economies by the Republic of California.

A shaky euro, a strong dollar and California's booming $1.330 trillion economy combined last year to push the nation's most populous state past France's $1.281 trillion economy and within striking distance of Britain, which is the world's fourth-largest economic power, at $1.415 trillion, according to a new analysis by the Los Angeles Economic Development Corporation, a business group here.

"It's hilarious because no country has tried harder to make itself important than France, and no place has worked harder than California to screw itself up," said Joel Kotkin, an economist and senior fellow at Pepperdine University in Malibu. "So I think zen works."

The study was based on California's employment and personal income data from last year, and on data from the Paris-based Organization for Economic Co-operation and Development, using current exchange rates. It ranked the United States economy No. 1 over all, followed by those of Japan and Germany. Other data, or exchange rates from a different period, might produce different results.

"We got a phone call from the French media, a little bit huffy," said Jack Kyser, chief economist for the Economic Development Corporation. "We're benefiting from a very strong dollar, but also spectacular economic growth.

"California added 527,000 jobs last year. We probably won't see anything like that over the next couple of years. Obviously, California was on a roll, and this move up sure shows it," Mr. Kyser said.

"In the past, when the Southern California region bumped past the economy of South Korea, we got a couple of hurt phone calls, too."

Yo-Jung Chen, the vice consul and press attaché at the French consulate here, was philosophical.

"We all know that California is a big state, and we knew from a long time ago that if California became independent it would be the sixth or seventh economy," Mr. Chen said. "Now it's the fifth, and since California is a big trading partner for France, we congratulate it. We believe this situation is mostly due to the exchange rate, and that the economy in Europe and in France is quite strong."

And, he added, "We still believe we produce the best wine in the world."